February 1, 2023
SINGAPORE – Local power producer YTL PowerSeraya will import electricity on a commercial basis from Malaysia for the first time, the company announced on Monday.
YTL PowerSeraya will purchase 100 megawatts (MW) of electricity over two years from TNB Power Generation’s gas-fired plant in Pasir Gudang, Johor.
TNB Power Generation is a subsidiary of Malaysia’s national electricity company Tenaga Nasional Berhad (TNB).
This will make up about 1.5 per cent of Singapore’s peak electricity demand, enough to power about 144,000 four-room Housing Board flats for a year, The Straits Times understands.
The electricity will be exported via a recently upgraded interconnector between the two countries.
A ceremony for the signing of the cross-border electricity purchase agreement was witnessed by Singapore’s Manpower Minister Tan See Leng and Malaysia’s Minister of International Trade and Industry Tengku Zafrul Tengku Abdul Aziz.
A YTL PowerSeraya spokesman said the company expects to commence imports from Malaysia in the second half of 2023 but added that pricing details were confidential.
Both YTL PowerSeraya and TNB will work closely with the Energy Market Authority (EMA) of Singapore and Malaysia’s Energy Commission to refine all technical settings and regulatory arrangements.
The agreement will take effect once all conditions are met, the spokesman said.
The electricity importer licence for Malaysia was awarded to YTL PowerSeraya in October 2021 over a period of two years.
The company is the only party in Singapore with prior experience in cross-border power trade and financial settlements, having traded across the interconnector to supply electricity to TNB in 2011 and 2013.
The arrangement is part of a two-year trial to facilitate larger-scale electricity imports into Singapore, which aims to tap regional power grids for cleaner energy resources as it transitions from natural gas.
The electricity supplied, however, is generated from fossil fuel as Malaysia currently permits the export of only non-renewable energy to Singapore.
YTL PowerSeraya’s spokesman said that “this is still a significant first step in our preparation to import power from any energy source in future”.
Said YTL PowerSeraya chief executive John Ng: “We believe that this is the first step in our vision of a strong Asean power grid, where electricity imports may eventually form a key part of Singapore’s energy mix.”
YTL PowerSeraya is a subsidiary of Malaysia-listed YTL Power International, which generates and sells power to TNB.
In 2022, the company paid $270 million in cash to buy a gas-fired power plant from Singapore’s Tuaspring, which was formerly owned by the now-bankrupt water company Hyflux.
The plant added a further 396MW to YTL PowerSeraya’s electricity generating capacity, taking it to a total of 3,100MW, and making it one of the largest power generation companies in Singapore.
YTL PowerSeraya also distributes electricity in Singapore through its retail arm Geneco, which is one of Singapore’s surviving electricity retailers after high oil prices forced at least three other retailers to fold in 2022.